The Rise of Chinese 3PL's

Updated
Beijing Time

A variety of factors will determine if China’s 3PLs can continue to increase their competitiveness

Some of this year's supply chain challenges have been natural disasters – the winter storm in southern China, the Wenchuan earthquake – while others are market-based, such as rising fuel costs and the expansion of supply chains into central and western China.

These challenges make it imperative to select the right 3PL provider for one's operations in China. Here's the catch: at this point in the game, neither domestic nor international 3PLs are capable of delivering comprehensive logistics services at every step in the supply chain.

Domestic 3PLs have a home field advantage, but are faced with massive challenges when trying to provide services outside China's borders. International 3PLs are established and highly competitive outside of China, but on the mainland they are forced to either develop their national operations on their own – which is both costly and time-consuming, or outsource some of their operations to smaller local companies that may not be able to meet international service standards.

More than six years after China's entry into the WTO, the 3PL landscape has evolved rapidly, with major international players competing with a mall number of domestic companies with the vision – and the capital – to raise their service levels and competitiveness. Not to be overlooked, a massive pool of small-scale domestic logistics providers will also have a major impact on developmental trends in China's 3PL market.